MAPCA - valued at 7c !

Here is an article from todays AFR where Deutsche value the partly paids at 7c.

Macquarie flies low

Relations between Macquarie Bank and Deutsche Bank have sunk to new depths, judging by the latest Macquarie Airports research from Deutsche analyst Clinton Wood, in which he ascribes a 7¢ value (you read that correctly) on its partly paid units.

The report is proving contentious not just for Macquarie but for numerous institutional investors, many dismissing it as sour grapes from Deutsche given its consortium lost in the bidding for Sydney airport. (Of course, as is well known, the research arm of an investment bank is independent of corporate finance.)

Essentially Wood reckons that an 11 times enterprise value to EBITDA multiple is appropriate and this implies a fully paid share price of $1.07. This is based, he says, on the quality of the MAp portfolio, a 65 per cent gearing level compared with a listed sector average of about 30 per cent, and the management fee structure.

His arguments are the point of fierce debate.

For a start his use of EV/EBITDA contradicts Deutsche's DCF methodology for valuing Auckland International Airport. Another criticism, as articulated by a fund manager, is that he allows for no diversification value from MAp having a portfolio of assets with different regulatory/geographic profiles when he compares it to single asset Auckland or BAA (Heathrow).

With the $192 million retail component of the latest MAp raising for Aeroporti di Roma clouded by negative sentiment toward Macquarie and impacted by the global equity meltdown, it is fortunate that $180 million of that figure has been sub-underwritten.

Already on-market has seen the institutional proportion of the share register rise from 70 per cent at the time of the float to in the vicinity of 80 per cent to 85 per cent.